Understanding the 2025 Tax Brackets: Key Information for Next Year’s Taxes
According to The Street, As inflation continues to decrease, taxpayers will still benefit from inflation adjustments to their 2025 taxes, though this year’s increase is the smallest in several years.
Inflation Adjustments for 2025
On October 22, 2024, the IRS revealed its inflation-adjusted tax brackets for the 2025 tax year, which will be filed in 2026. The adjustments include an increase in the standard deduction and revised income thresholds for various tax brackets.
The IRS has raised tax brackets by approximately 2.8% for 2025, marking the smallest adjustment in three years. This modest increase is due to a significant decline in inflationary pressures, as reflected in the consumer price index, reaching its lowest levels since February 2021. For context, the IRS made a 5.4% increase for 2024 and a 7.1% increase for 2023.
Combatting Bracket Creep
The IRS’s adjustment of tax brackets aims to address “bracket creep,” a situation where inflation pushes taxpayers into higher tax brackets despite their real income—adjusted for purchasing power—remaining stagnant.
Standard Deduction Changes for 2025
The standard deduction will see an increase of approximately 2.8% for the 2025 tax year. This deduction is commonly used to lower taxpayers’ taxable income, resulting in reduced tax bills for many Americans. The standard deduction varies based on filing status, with details as follows:
Tax year 2024 standard deductions vs tax year 2025 standard deductions
| Filing Type | Tax Year 2024 | Tax Year 2025 | Change |
|---|---|---|---|
| Single filers | $14,600 | $15,000 | $400 or 2.8% |
| Married filing jointly | $29,200 | $30,000 | $800 or 2.8% |
| Married filing separately | $14,600 | $15,000 | $400 or 2.8% |
| Heads of household | $21,900 | $22,500 | $600 or 2.8% |
Additional Standard Deductions
Taxpayers aged 65 and older can benefit from an additional standard deduction of $2,000 if filing as single or heads of household, and $800 per qualifying individual for married couples filing jointly or separately. Individuals classified as legally blind can also claim an additional standard deduction of $1,850 for single filers or heads of household, and $1,500 per qualifying individual for married couples.
Other Tax Breaks for Tax Year 2025
Additional tax breaks include the Earned Income Tax Credit for qualifying taxpayers with three or more children, which will be $8,046 in 2025—a $216 increase from $7,830 in 2024. The Estate Tax credit also rises by 2.8%, increasing the basic exclusion amount for estates of decedents who die in 2025 to $13,990,000, up from $13,610,000 in 2024.
Tax Brackets for Tax Year 2025
The IRS has established seven federal tax brackets for the 2025 tax year, with income limits adjusted upward by approximately 2.8% across the board. Here’s a breakdown of the tax brackets by filing status:
2025 tax brackets for single filers
| Taxable Income | Tax rate |
|---|---|
| $0–$11,925 | 10% of the taxable income |
| $11,926–$48,475 | $1,192.50 + 12% of the amount over $11,925 |
| $48,476–$103,350 | $5,578.50 + 22% of the amount over $48,475 |
| $103,351–$197,300 | $17,651 + 24% of the amount over $103,350 |
| $197,301–$250,525 | $40,199 plus 32% of the amount over $197,300 |
| $250,526–$626,350 | $57,231 + 35% of the amount over $250,525 |
| $626,351 and above | $188,769.75 + 37% of the amount over $626,350 |
2025 tax brackets for married couples filing jointly
| Taxable Income | Tax rate |
|---|---|
| $0–$23,850 | 10% of the taxable income |
| $23,851–$96,950 | $2,385 + 12% of the amount over $23,850 |
| $96,951–$206,700 | $11,157 + 22% of the amount over $96,950 |
| $206,701–$394,600 | $35,302 + 24% of the amount over $394,600 |
| $394,601–$501,050 | $80,398 plus 32% of the amount over $394,600 |
| $501,051–$751,600 | $114,462 + 35% of the amount over $501,050 |
| $751,601 and above | $202,154.50 + 37% of the amount over $751,600 |
2025 tax brackets for married couples filing jointly
| Taxable Income | Tax rate |
|---|---|
| $0–$23,850 | 10% of the taxable income |
| $23,851–$96,950 | $2,385 + 12% of the amount over $23,850 |
| $96,951–$206,700 | $11,157 + 22% of the amount over $96,950 |
| $206,701–$394,600 | $35,302 + 24% of the amount over $394,600 |
| $394,601–$501,050 | $80,398 plus 32% of the amount over $394,600 |
| $501,051–$751,600 | $114,462 + 35% of the amount over $501,050 |
| $751,601 and above | $202,154.50 + 37% of the amount over $751,600 |
2025 tax brackets for married couples filing separately
| Taxable Income | Tax rate |
|---|---|
| $0–$11,925 | 10% of the taxable income |
| $11,926–$48,475 | $1,192.50 + 12% of the amount over $11,925 |
| $48,476–$103,350 | $5,578.50 + 22% of the amount over $48,475 |
| $103,351–$197,300 | $17,651 + 24% of the amount over $103,350 |
| $197,301–$250,525 | $40,199 plus 32% of the amount over $197,300 |
| $250,526–$375,800 | $57,231 + 35% of the amount over $250,525 |
| $375,801 and above | $101,077.25 + 37% of the amount over $375,800 |
2025 tax brackets for heads of household
| Taxable income | Tax rate |
|---|---|
| $0–$17,000 | 10% of the taxable income |
| $17,001–$64,850 | $1,700 + 12% of the amount over $17,000 |
| $64,851–$103,350 | $7,442 + 22% of the amount over $64,850 |
| $103,351–$197,300 | $15,912 + 24% of the amount over $103,350 |
| $197,301–$250,500 | $38,460 plus 32% of the amount over $197,300 |
| $250,501–$626,350 | $55,484 + 35% of the amount over $250,500 |
| $626,351 and above | $187,031.50 + 37% of the amount over $626,350 |
Important Dates
Tax brackets apply to income earned during the 2025 tax year. The filing period for these taxes will begin in early 2026 and conclude in April of that year, barring any extensions.
Future of Tax Cuts
The Tax Cuts and Jobs Act of 2017, signed into law by former President Donald Trump, significantly reformed the U.S. tax system, nearly doubling the standard deduction and lowering the corporate tax rate to 21%. However, unless Congress takes action, these cuts are set to expire in 2026. Trump has pledged to extend these tax cuts, while Vice President Kamala Harris has promised no tax increases for individuals earning less than $400,000 per year.
